Written by

Detroit Free Press Staff Writer

News of the $11-billion deal pleased investors; Kmart’s stock shares jumped $7.78 to $109, and Sears’, $7.79 to $52.99. Both chains had been facing an increasingly tough retail market, with Kmart declaring bankruptcy in January 2002 and both companies seeing sales drop.

“I think the combination of these two great American retailers will allow us to turbocharge our business,” said Aylwin Lewis, Kmart’s CEO who was chosen to be president of the new merged company, Sears Holding.

The purchase made Sears Holdings the third-largest retailer in the U.S. — $55 billion in annual sales and close to 3,500 stores. The company headquarters was located in Sears’ stomping grounds of Hoffman Estates, Ill.

Kmart, then Michigan’s fifth-largest publicly traded company, emerged from bankruptcy in May 2003.

S.S. Kresge — the “K” of Kmart — opened five-and-dimes in Detroit and Memphis, Tenn., in 1897 with a partner, but two years later, set off on his own to found his own company in metro Detroit. The first Kmart debuted in 1962 in Garden City; the retailer introduced its iconic “blue light specials” the following year.

Today, Sears and Kmart are down to around 2,000 stores. Last month, Sears Holdings said it was considering spinning off its Lands’ End brand. Its stock price peaked at $193 in April 2007; it closed at $64.39 on Friday.